Huawei Now Using Patent Claims To Demand $1 Billion From Verizon, As The US Tries To Chase Huawei Out Of The US Market

from the patent-trade-wars dept

This one combines a few stories that we’ve covered a lot over the years, showing how they’re intersecting. For some time now we’ve been covering the US’s evidence-free attacks on Huawei, the Chinese telco equipment giant. Basically, for years, there have been stories insisting that Huawei is too closely linked to the Chinese government, leading to fear mongering stories saying that the company should be effectively barred from the US. However, multiple attempts to find security flaws in Huawei’s products have failed to show any kind of backdoors, and the fact that US-based Huawei competitors often seem to be making the loudest noises about the Chinese giant should raise some eyebrows.

The other story we’ve covered a lot is around China and patents. For years and years, US companies (and policymakers) would go on and on about how Chinese companies didn’t respect US patents, and demanding that China “must respect our IP.” As we’ve highlighted for years, the Chinese government realized a decade or so ago that since the US kept trying to apply diplomatic pressure to “respect patents,” China realized it could just start using patents as an economic weapon. The number of patents granted in China started to shoot up, and (surprise surprise) suddenly in legal disputes, Chinese companies were using patents to block American competitors. And the US couldn’t really complain since it was the US that demanded China “respect patents” so much.

Just a few weeks ago, we noted that China was gearing up to respond to Donald Trump’s ignorant trade war by using patents against US companies.

Put it all together, and it should be no surprise at all that Huawei is now demanding $1 billion from Verizon for patent infringement.

Verizon is reportedly using equipment through other companies that relies on Huawei patents covering core networking gear, internet of things technology and wireline infrastructure. Verizon and Huawei representatives met last week in New York to talk about whether the gear could infringe on Huawei patents, Reuters said.

“These issues are larger than just Verizon,” a Verizon spokesman told Reuters. “Given the broader geopolitical context, any issue involving Huawei has implications for our entire industry and also raises national and international concerns.”

The US government walked right into this. For years it’s been demonizing Huawei without evidence, while at the same time demanding that China respect patents. So, of course, it opened itself right up to Huawei now claiming patent infringement against US companies. Even better, it’s over third party gear. US policymakers can’t seem to think more than a single move ahead, because it was fairly obvious how all of this would play out years ago, and yet they walked right into it.

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Companies: huawei, verizon

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Comments on “Huawei Now Using Patent Claims To Demand $1 Billion From Verizon, As The US Tries To Chase Huawei Out Of The US Market”

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Tim R says:

A Question

This is something I’ve always wondered about, particular with some of the more egregious patent trolls: why doesn’t the concept of patent exhaustion come into play here? Verizon is no saint, but this is gear that they’ve bought from other parties. Why doesn’t stuff like this get thrown out immediately? This is as ridiculous as trolls shaking down offices for using a copier.

Is patent exhaustion more of a concept than a law, or is it actually codified somewhere?

James Burkhardt (profile) says:

Re: Re: A Question

Part of the issue is that Huawei has a chinese patent, and that might make things weird if for instance the 3rd party licenced the applicable US patent, but not the Chinese patent, which then leads to the part not being manufactured legally, which is a new fact to the patent cases you cite. We are also unsure from this information what regions huawei is claiming, as the 3rd party tech might not be properly licenced for sale in all regions.

That Anonymous Coward (profile) says:

Finally a patent war story where I want to root for the patent holder.
They are a practicing entity.
They are facing unfair competition.
They are doing exactly what was demanded of China.

I love a story where they make their own bed & have to sleep in it.

Yes its more likely about the idiotic claims they are spying on everyone, that still has yet to have any evidence to support that claim. One wonders what other sorts of fun things are in the pipeline… I mean if you have your tech made in China & it infringes on Chinese patents does the container ever make it on a ship?

Anonymous Coward says:

Re: Re:

I bet if you had access to all the poop verizon has, it would be much harder to prove they don’t spy on everyone vs. they do. One more thing.. Finally, someone is demanding $1 Billion from verizon. Too bad its not an American. They once demanded I pay $250 for a four minute conversation to someone in the Bahamas.. that phone went into the ocean.

TheLizard (profile) says:

It’s not like Huawei is an innocent actor in all this. Do they have patents on the trade secrets they stole from US and European companies? Does that even make it a valid patent?

They admitted to stealing code from Cisco back in 2004, they settled a case with Motorola in 2010 after stealing trade secrets from them. CNEX Labs claims Huawei stole from them a couple of years ago.

Anonymous Coward says:

Re: Re:

Do they have patents on the trade secrets they stole from US and European companies?

If they do then it should be easy to show their patents were predated by the US patents. If not then it’s a valid patent they can sue over. The more viable question is how many of these patents are legit to begin with and not just standard ways of doing things that really shouldn’t be patentable on either side?

They admitted to stealing code from Cisco back in 2004, they settled a case with Motorola in 2010 after stealing trade secrets from them. CNEX Labs claims Huawei stole from them a couple of years ago.

Relevance? Also you ignored this part from the link you posted:

But the jury also decided that Huawei’s misappropriation was not “willful and malicious,” and it did not award any damages from the trade-secret claim.

Anonymous Coward says:

Re: Re: Re:

Ah, these are the ’emperor has new clothes’ patents, right? (nudge, nudge, wink, wink)

Sure we "see" that you think your patents are valid, but that’s a nice Telecom monopoly you have there, it would be a shame if something were to happen to it, you know what I mean (this is china, we’ll break your kneecaps and take your idea and patent it, then sue you with it)

Anonymous Coward says:

Re: Re: Re: Re:

No, first off, we don’t know what these patents are, so Huawei could have a legitimate claim. But it could very well be that these are the ‘this should never have been patented by Verizon or Huawei in the first place because it’s a standard way of doing things’ patents. Like round wheels. You can’t patent round wheels because there’s literally no other viable shape to make a wheel.

If you would have actually read my comment you would see that I’m not saying one way or the other whether they are valid patents or not. I’m merely pointing out that TheLizard doesn’t know what he’s talking about, is making wild, baseless claims, and the link he posted doesn’t say what he thinks it says.

Douglas says:

Re: Re: Trump Can't Pardon Verizon

The President’s Pardon power applies ONLY to Federal Criminal Charges. Patent Law claims are Federal Civil Charges. The President is powerless…

The ONLY path would be for Congress to pass a statute that bars patent claims by a broad class of non-US companies. Any law that only mentions Huawei or only applies to Huawei would be an unconstitutional “Bill of Attainder”.

In fact the only reason why the current ban is not unconstitutional is because it is NOT a new law. The law granting the President the power to ban companies does not mention any particular company.

ECA (profile) says:

And what we are talking about..

250,000 patents on cellphones..WOW..
Huawei has 56,492 patents, and it’s not afraid to use them

Huawei holds 56,492 active patents on telecommunications, networking and other high-tech inventions worldwide, according to Anaqua, an intellectual property-management software firm. And it’s stepping up pursuit of royalties and licensing fees as its access to U.S. markets and suppliers is being restricted.

protracted licensing talks with Verizon Communications Inc. and is in a dispute with chipmaker Qualcomm Inc. over the value of patents. Huawei also lodged claims against Harris Corp. after the defense contractor sued it last year alleging infringement of patents for networking and cloud security.

Just so that you know.

We are #1, We are #1,……
Looking at this list…No we arnt..
Cant read this, can anyone??

The recent changes int he USA have created Problems..Most of which (IMO) are related to the internet, and being Able to Look into the USA and whats happening in the background.
REALITY, of what Is the USA..and finding that the USA isnt made of streets of gold.
The infighting of the Corps, and Corps vs, Citizens vs Gov. is Starting to Hurt the USA.
I cant say I know everything, or even 1/2 of our problems, but there seems to be a FEW major things that need to be fixed..

Who started the idea that the Gov. was getting to large and overbearing? I dont think the Citizens started this. and allot of this may have come After we demanded that Manufacturing CLEAN UP THEIR MESS’S..

Corps/capitalism, Who gave them all this power? Most of the regulations and Controls that were implemented TENDED to be after the fact and for good reasons..but most of those regulations have been taken away/removed. And I dont think many of them hit the front page when this happened.

thinking that our representitives have to be Angles, is stupid. I dont mind Human being’s, I just want an Honest person, willing to let us KNOW he/she/it is HUMAN. When was the last time you heard anything from our Federal reps? when did they ASK US, about anything? Are you thinking that they dont need to KNOW how we think, that according to HOW we voted for them is sufficient? Thats like thinking that EVERYONE thinks the same, and things never change.

HOW in Hell can our reps end up holding a Temp job for more then 10 years?? Things DO change. and the only way I can see them STAYING up there and not having a job at BK, Target, McD, is because they are cheating the system.
Why in the world would we let 2 parties(30% of the country) decide WHO is to stand up and represent us(the other 70%). I would demand something in elections, a button that says, "NONE OF THE ABOVE".
And I would suggest 2 other things for our country.
A vote of no Confidence.(which has been declined so many times its stupid)
And a Line Veto system. This would be fun, as a President can Erase stupid things in a bill and send it back to be voted on/OR pass the bill with Certain things DROPPED. AS the Congress LOVES adding lettle things on the bottom that have nothing to DO, with the Law being passed.
We really need to cleanup and correct some of the Rules in congress for Passing bills.

That One Guy (profile) says:

'Wait, no, you weren't supposed to use that AGAINST us!'

Attempt to chase the company out of the country for bullshit protectionist reasons, while providing the company the perfect way to return the favor to one of those chasing them out since they no longer need to play nice…

The situation strikes me as a win-win really. Either Verizon takes a hefty hit, or the lawsuit is struck down and in so doing provides a precedent that should shift patent law ever so slightly towards sanity.

Stoatwblr (profile) says:

Re: 'Wait, no, you weren't supposed to use that AGAINST us!'

Even more amusing:

Huawei holds those patents in most world jurisdictions, not just the USA.

And one of the first casualties of a trade war is that it no longer has any compelling reason to play the FRAND game with them, or with its 5G patents.

Anyone who’s read Terry Pratchett’s Discworld books knows the Pax Moporkia:

"If you fight, we’ll call in your mortgages. And incidentally that’s my pike you’re pointing at me. I paid for that shield you’re holding. And take my helmet off when you speak to me, you horrible little debtor."

Now we get to see it in action.

Furless Zombie Hunter says:

Oh, good! The Zombies are back! THREE in this one piece!

Leading for BLATANT astro-turfing with FIVE comments in NINE years of which EIGHT are blank:

Jan Tangring: 5 (< 1), 3 year and 5 year gaps May 10th, 2010

With more comments but only five years blank in seven:

Stoatwblr: 36, (5), 3 year gap; 2 year gap after 1st; 12 Jul 2012

And with mere two year gap, almost believeable IF the unequivocal Zombies hadn’t popped out TOO:

Federico: 30 (11), 2 year gap 2 Sep 2016

Anonymous Coward says:

Some evidence

See the final two paragraphs on page 45 of Ross Anderson Chapter of the new version of his Security Engineering:

He doesn’t cite (or I can see the citation) but he makes a number of very specific claims coming from GCHQ. Now, I am not saying they’re not biased, but at least here we have specific claims. Crappy software engineering and cut/paste multiple broken versions of OpenSSL that they dont know how to patch, and more.

I dont trust Cisco either.

Anonymous Coward says:

Re: Some evidence

Sounds like a lot of big companies and almost all small companies, although it’s true that Chinese companies in general seem to be really bad about software.

I worked at a big US tech company that also had way too many versions of way too much software from way too many questionable sources… and way too much reliance on random hacks done to old versions by people who didn’t work there any more. I mean, they didn’t intentionally pirate stuff, but they were still hosed from a security point of view.

They were ahead of what Anderson describes for Huawei in terms of knowing what they had, but still not in a position to respond to vulnerabilities in any really effective way.

Stoatwblr (profile) says:

Re: Re: Some evidence

The UK’s MI5 had it about right.

Huawei code: Shoddy

Everybody else’s code: Shoddy. Occasionally slightly less so.

I’m been in a position to pull apart firmware for our Huawei switchgear (It’s Wind River Linux at its core) and the single biggest problem (and security risk) is "paid by the yard" Bangalore contractors who really don’t have a clue what they’re doing or why it’s important.

Which – unsurprisingly – is the same problem just about everybody else faces when outsourcing their code.

After all, why write something nice and tight in 20 lines when you get paid more for 20 pages of incomprehensible garbage?

Anonymous Coward says:

There is great disorder under heaven; the situation is excellent

The win from this tiff may be that the "integrated" world economy my finally get some redundancy. Not only Huawei, but China(TM) may retaliate and cut US companies off from various relationships. Both sides, and indeed all sides, will be forced to build capabilities they’ve been relying on the other for.

… yet I don’t think it’ll go far enough that most consumers won’t have access to both sides’ products, at least if they’re willing to go to a little effort to get them.

We may end up with more than one or two factories on the planet that can make any given thing, which is good for resilience in disasters and wars and whatever. We may have more choice of mobile operating systems, even in open source form. We may have more choice of who spies on us, and maybe even some competition to demonstrably not spy.

Prices may be a bit higher, but at this point I think it may be worth that to have the world economy a bit less brittle.

Not saying that that was Trump’s master plan or anything, just that there may be some good results.

Gerald Robinson (profile) says:

Obtaining evidence of backdoors is nearly impossible

It would require design documents for the SW&HW which are not forth coming! A detailed examination of recompiled code would typically require hundreds of man years by specialized (unstable readly) analysts and would likely price inconclusive. The U.S. VISa operations in this area were revealed by a leak and are still ongoing. DJIs answer to keep our zones for their drones was enabling code in most drones that sends an I’d and location to their servers in China (likely elsewhere as well) and then sending back a code that would take over the drone and prevent intrusion! This inadvertent revelation of malign code probably didn’t lead to Huawei’s unmasking- almost certainly it was a human leak.

I realize that pricing a negative is impossible but Huawei didn’t make even a real gesture. Possibly as it would reveal the extent their phones and tablets snoop on users!

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